Tuesday, November 30, 2010

The Playful Musings of Illogical Optimists

I recently came across a "discussion" between Matt Ridley, author of The Rational Optimist, and Bill Gates in John Maudlin's "E-Letter" about the nature of optimism and pessimism. Ridley generally argues that our "success" as a species up to this point has been primarily a result of our inherent ability to trade with each other, as evidenced by the very early use of rare objects far away from the sources needed to produce them. He further argues that, consequently, humans have continued to increase their collective prosperity throughout the ages, despite many dire predictions of impending doom that were being made all the while. Bill Gates has written a book review in which he quarrels with a few specific examples that Ridley had provided (problems in Africa and Climate Change), but he essentially agrees with Ridley's main point that many people are "overly concerned with potential problems", especially in "rich countries over the last several centuries".

This so-called discussion between Ridley and Gates is, in fact, not much more than a simple back-and-forth between two people who hold self-contradictory views and know little about the topics they discuss. That statement may seem harsh, but reality can and has been harsh, a fact casually dismissed by the writers as being "too pessimistic" for their personal liking. The response by Gates is an amazing example of how human beings, those creatures who have historically been so "successful", are also plagued with many logical fallacies and cognitive biases. In fairness to Gates, these are not isolated flaws limited to the minds of a few American billionaries, but a pervasive feature of human beings in all complex societies around the world. Nicholas Nassim Taleb has deftly illustrated this point in his books The Black Swan and Fooled by Randomness, which I highly recommend.

Anyway, I will not even dwell on Ridley and Gates' deep lack of understanding about the details of macroeconomics, climate change, environmental sustainability and whatever else they have discussed, because it would devote too much time towards arguments which can be dispelled in a much simpler fashion. I'll just quickly point out that Gates has urged us to consider "super-intelligent computers" as a major threat to humanity unfairly neglected by Ridley in his book, instead of financial meltdown, peak oil or geopolitical instability.

Not to be outdone by another man's ignorance, Ridley responds that we are gradually transitioning away from carbon-rich coal to "hydrogen-rich fuels like oil and especially gas", so as to render climate change a greatly over-exagerrated threat. A reader can't help but get the feeling that these gentleman expect people to take their completely unsupported assertions as the gospel truth, instead of with the heavy dose of salt they so clearly deserve.

However, since the limited discussion I read was focused mainly on the broad nature of optimism and pessimism, I will stick to the logical flaws they pepper throughout their arguments. Gates really manages to kill his logical credibility right off the bat when he refers to the following quote by John Stuart Mill:

"I have observed that not the man who hopes when others despair, but the man who despairs when others hope, is admired by a large class of persons as a sage."

Assuming that Mill's assertion is mostly true, we are left with the point that people tend to respect purveyors of "despair" rather than those of "hope". With a logical leap of greatness, Gates then uses Marx's hugely populary theory of capitalism as an example of "excessive pessimism", since it was (is) respected by many people and also made dire predictions about the future of capitalist economies. He effectively attempts to dispel extremely valid concerns about the sustainability of capitalism, developed over hundreds of years and now more prescient than ever, by confusing a general anecdote with the validity of a specifc scientific analysis.

Yes, many preachers of "doom and gloom" may get significant amounts of attention and achieve large followings, but that by no means speaks to the credibility of their underlying arguments. By Gates' reasoning, any popular scientific analysis that predicts signficantly negative outcomes should automatically be treated as suspiciously pessimistic, including the widely-accepted theory of man-made Climate Change, which Gates happens to support.

Unfortunately, the above logic will seem impeccable when measured against that contained in his next few statements. And I quote:

"Pessimism is often wrong because people assume a world where there is no change or innovation. They simply extrapolate from what is going on today, failing to recognize the new developments and insights that might alter current trends."

Gates' point about people extrpolating past trends into the future is a valid one, but it provides no logical support for his premise that "pessimism is often wrong", because that particular cognitive bias applies just as well, if not more so, to attitudes of optimism about the future (re: constant denial by people in the developed world that economic growth has indefinitely stagnated). Between the twelve lonely economists who were predicting a housing-driven financial meltdown and the millions of people expecting housing prices to rise forever, it should be crystal clear who was in the business of extrapolating past trends. By this point in his review, Gates has established an illogical momentum which cannot be stopped. In an almost unbelievable fashion, he waits for no more than one sentence from the prior passage before dropping this bombshell:

"A lot of the rhetoric about sustainability implicitly assumes that we will exhaust our natural resources, as though there will never be any substitution of one commodity for another in the future. But there has always been such substitution."

He has immediately employed the tactic he just criticized pessimists for incorrectly using, as if billions of dollars in net worth come at the expense of short-term memory. The suggestion is that humans have always substituted plentiful commodities for rapidly depleting ones in the past, and therefore there is no reason to expect anything different will happen in the future. Apparently, it is only wrong to project past trends into the future when those trends don't support the argument you are trying to make. Gates has completely missed the lesson of that cognitive bias, which is not that humans have always innovated their way out of historical problems, but that the specific future behaviors of complex systems are inherently unpredictable. Broad structural shifts such as energy or resource scarcity, on the other hand, are quite predictable within a range of certainty.

Finally, the most egregious logical fallacy employed by both Ridley and Gates is that of projecting their personal definitions of "success" onto the whole of humanity, throughout all of time. They view the technological and sociopolitical developments over centuries of evolution as being clearly beneficial to all of mankind. If certain arbitrary measures have improved for specific segments of human society, such as "lifespan, nutrition, literacy, wealth", then clearly progress has been made and all of the pessimism was much ado about nothing. It is a deeply-rooted fallacy held by many people born in the developed world and living in relative stability, who tend to ignore the large historical and ongoing costs incurred to make their current lives possible.

They are ignoring the Earth's struggling ecosystems, the extinct biological systems, the destructive wars, the massive geopolitical instabilities formed over centuries, the lives of future generations, the tragic disconnects with nature, the deterioration of moral fabric, the structurally pervasive inequality and the very reasons why Bill Gates feels compelled to donate such large sums of money to humanitarian aid missions in the first place. All of the above and countless other things have directly occurred or will occur as a result of the human "progress" that now makes them so optimistic.

Of course, I'm just an unknown blogger who has written no book published by a major clearing house or reviewed by an American business icon in the Wall Street Journal. If I want to engage in this discussion of optimism and pessimism with Ridley and Gates, then my best shot is in the comment section underneath the online WSJ publication. After all, what good is informed knowledge and logical consistency when it underlies a "pessismistic" world view? John Stuart Mill was wrong, in so far as anyone who makes temporal generalizations about complicated social dynamics is wrong. In modern society, pessimism about the future is largely shunned by the mainstream, because so many people are fully expecting and entirely dependent on their promised lives to materialize.

We have been convinced by people like Bill Gates, and by our willful suspension of disbelief, that the growth story of the past will continue on indefintely into the future, and that the material gains from this growth will be fairly distributed to billions of people around the world. I say "we" because I have a hard time shaking free of this story myself, like a little child who has just learned Santa Clause doesn't exist. It takes courage and persistence to despair when others illogically scream at you to hope, so my question is this - when are we going to allow adults into this ever-important discussion? I suspect that when the next leg down of the ongoing financial crisis occurs and energy costs skyrocket, Ridley and Gates will lay low and speak with muffled voices, but still retain their optimism, because they have more than enough to survive.

4 comments:

I think that this debate is centered around two sides - one side that is optimistic that we'll collectively figure out a satisfactory solution to the world's current problems within the same general globalist hierarchy, and another that is optimistic we'll tear down the walls, build something new, more equitable, and sustainable, and that due to their advanced planning and foresight, their relative fitness will increase during and after this transition. There is a tug of war between these two side, because, at least on a short- to mid-term basis (due to the allocation of capital based on future expectations in our financial markets) any collective belief (either of these two sides) that is held strongly enough yields a self-fulfilling prophecy. Thus, the current system can be maintained for quite some time and can even be furthered in the direction of a Jetsons future based on the collective belief that the future is in fact headed in that direction. Eventually, this is exactly as theAutomaticEarth described it - it's a Wile E. Coyote situation where you don't fall until you look down, but you certainly can't hover there forever. Thus, eventually, the intractible math of the collective problems strongly favors the 'tear-down-the wall optimists'.As a side note, there are two classes of true pessimists - those who believe that the current system will continue in something like its present form and are currently shackled to the system (through debt, slave-wages, etc) and those who believe that collapse is imminent and despair at the thought of losing their worldly wealth. I would further argue that human nature and psychology strongly limit the size of this final group because of the power of people's addictions to shape their view of the future.

I think people will always manufacture whatever mirage they need in order to support their version of reality.....from teabaggers to spouses that deny the signs of a cheating spouse to workers whose paycheck depends on continuing some fantasy. We consider ourselves "civilized" despite all the evidence to the contrary, just as well off people did a hundred (or thousand) years ago.

Sadly, "misinformed people rarely change their minds when presented with the facts".

Teabaggers? You mean those folks that wish to return to the Natural Law meaning of the Constitution, and be left alone by the government? The ones that wish to end the FED and return the creation of our money to We te People? Right, they must be racists. You reveal yourself.

So Mick I guess you are a Glen Beck follower...seems you reveal yourself.

I was just thinking about the pessimistic/optimistic chasm myself. At some point justifying your optimisim with denial just gets transparently stupid to everybody willing to adhere to the terms of reality. Unfortunately we are in the minority and so the titanic will go down with a band playing, and when each individual drowns it will be too late to wish they had learned to swim and build boats.